Status of Nation's Health Care Industry in Y2K

Status of Nation's Health Care Industry in Y2K

With less than five months before an irrevocable and unavoidable deadline, major questions still remain about the ability of the health care industry to cope with the so-called Y2K problem.

In February the U.S. Senate's Special Committee on the Year 2000 Technology Problem reported: "The health care industry lags significantly in its Y2K preparations compared with other sectors." Of chief concern is that the thousands of computers involved in virtually all aspects of health care may not react properly to the change from 1999 to 2000 because of long-ago programming decisions that designed hardware and software around a two-digit date. Thus, computers that have not been properly tested and upgraded to recognize a four-digit date may assume that 2000 is really 1900, causing them to fail.

Notwithstanding the Senate's concerns, the likelihood of Year 2000-type problems impacting health care varies, depending on the person being interviewed.

In April, the head of the Health Care Financing Administration (HCFA), which is responsible for Medicare payments to providers, testified that her agency was making "remarkable progress." In her testimony, Nancy-Ann Min DeParle added, "All of HCFA's Year 2000 systems issues will be resolved and thoroughly tested and retested before Jan. 1, 2000." But, at the same hearing, an auditor from the government's General Accounting Office said that the Office of Management and Budget had designated the U.S. Department of Health and Human Services, which includes HCFA, "as a tier 1 agency on its three-tiered rating scale, meaning it had made insufficient progress in addressing the Y2K problem."

Nor is HCFA's readiness the only source of concern. "HCFA may be the largest payer, but it's not the only one," said one consultant. "HCFA accounts for about one-third of all payments to providers. The other two-thirds come from private payers, and they need to be ready, too."

The American Hospital Association (AHA) reported: "65.7% of surveyed hospitals' information systems are expected to be Y2K compliant by year end," and "31.9% are not expecting to be fully compliant...but do not anticipate any adverse effect on critical operations."

"The AHA results are a little more positive than what we're finding in our survey," said Joel Ackerman, a leading expert on the impact of Y2K problems in health care and founder of RX2000. While the AHA surveyed CEOs, he tried to reach the people responsible for Y2K activity, "and they tend to be a little less diplomatic."

The Senate committee report was even more explicit: "According to a report by the Gartner Group [a technology consulting firm], 64% of hospitals-primarily smaller hospitals-have no plans to test their Y2K remediation efforts."